A real options approach is a new way of thinking about corporate investment decisions. It is based on the premise that any corporate decision to invest or divest real assets, is simply an option. It gives the option holder a right to make an investment without any obligation to act. The decision maker, therefore, has more flexibility, and the value of this operating flexibility should be taken into consideration.
|Translated title of the contribution||Pricing of Real Options|
|Pages (from-to)||p. 70-81|
|Journal||Journal of Accounting and Finance, Association of Accounting and Finance Academicians (AAFA) Publications|
|Publication status||Published - Apr 2005|
- Real Options, Financial Options, Net Present Value Method, Strategic Investments.